A Comparative Economic Analysis of US and EU Law
Chapter 2: Section 2 and Article 102(b): The Antitrust Roots of the Antitrust-IP Interface
SET THE STAGE FOR THE FOLLOWING CHAPTERS In order to examine whether, when and why Section 2 of the Sherman Act and Article 102 of the TFEU can serve to curb dominant firms’ IPRs, it is useful to describe the main features of these two provisions. First, this chapter discusses the many policy variables that, absent an economic yardstick to measure the duration and broadness of market monopolies, affect the enforcement of Section 2 and Article 102. Then, it describes not only their apparent content, not only what the economic theory suggests as to the standard for judging monopolistic behaviors, but also the aims and the analytical methodology that US and EU antitrust authorities have historically wanted, and now want, to pursue and endorse in enforcing these rules. In this way the chapter establishes that nowadays US and EU antitrust authorities prohibit dominant firms’ conduct that strengthen market power and harm consumer welfare, by profitably reducing market output, raising market price and degrading the quality and variety of their products. Afterwards, the chapter sets the stage for Chapters 3 to 6 by concluding that two questions deserve to be answered in connection with dominant firms’ practices involving IPRs: from a legal perspective, what protecting innovation (say also, consumer welfare over the long-run) has meant to the US and EU antitrust authorities dealing with these practices and, from the economic perspective, what the economic models suggest as to the impact that these practices produce on competition and innovation. JUDGING DOMINANT FIRMS’...
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